Before selling a residential property, the current owner must disclose any known issues on the property with the potential to affect its value to prospective buyers. This is a legal requirement that allows potential buyers to make an informed decision about whether or not the purchase of the property would represent a bad investment for them. It is important for sellers to comply with applicable state laws when making real estate disclosures. Otherwise, the buyer could file a lawsuit alleging misrepresentation.
According to FindLaw, a seller does not have to fix any known issues before selling the home. It is enough simply to acknowledge their presence in the disclosure. A seller also does not have to actively seek out any problems to disclose. Reporting the issues of which the seller already has knowledge is sufficient.
Real estate disclosure requirements vary by state. The Illinois General Assembly requires sellers to fill out a specific form and indicate by checking “yes” or “no” whether the property has a known issue in a particular area. Among the issues that sellers must disclose are termite infestations, material defects and unsafe concentrations of hazardous materials, such as asbestos or radon. If the seller has knowledge that the property was ever the site of the illegal manufacture of methamphetamine, he or she must disclose that as well.
Once the seller has completed the disclosure report, he or she must deliver it to a prospective buyer, or an agent working on the buyer’s behalf, by first-class mail or alternative delivery service, by fax or by delivering it in person.